Babar Ali
U. of Washington; Seattle University
We are in the midst of turbulent times in corporate America. Enron got the ball rolling and it now seems to be fashionable to hunt down CEO’s like deer.
It has not always been this way, and in a somewhat recent interview we hear
about how angry it makes Jack Welch, the legendary CEO of GE. What makes Jack angry isn’t the fact that this is going on, but the new restrictive environment that has resulted. America now views big corporations as the evil being that needs to be kept a close eye on; a criminal until proven innocent. Jack’s right to be upset… and well, he’s normally right on most things in general.
What the public doesn’t take time to understand is the fact that although there are a bunch of corrupt executives running about, the majority of business is conducted within limits and in moral compliance. It is a small percentage of executives that are guilty of betraying the public trust, but their actions have led to sweeping regulatory actions that are now causing financial burdens on all.
The Sarbanes-Oxley Act not only clamps down on corporate freedoms, but it also creates an unnecessary, and in some cases crushing, financial burden on companies. Some companies have started spending over $43 million per year (per year!) on regulatory compliance. Is this justified? Jack doesn’t seem to think so, and neither do I. But just ask the thousands of employees who have been victimized, and you’ll soon understand the logic behind greater regulation.
Because of what is currently at stake, namely the livelihoods of millions of Americans, the government can not afford to take chances on another big corporate scandal, especially when it can be avoided. What needs to improve are the types and degrees of regulations in play.
What has been suggested at this time is to not take the measures as hurdles, but to include them as part of daily business activities- like pressing the power button on the computer to turn it on is not thought of as a burden, because it is a necessary procedure that one follows before taking the next step. We know that corporate cultures are slow to change, and that is why it will take some time to adjust to it. Deloitte Consulting is minting money (as are others) trying to develop corporate exercises that embody the elements of the SOx, and in the future the government has shown signs of willing to bend here and there, but only once things have settled.
But until then… be vewy vewy quiet, I’m hunting a CEO!
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